IndianOil begins supplying petroleum products

After around a three-year hiatus, Indian Oil Corporation has started supplying refined petroleum products to Bangladesh through ocean-going vessels under a long-term arrangement, sources said.

It already delivered a 33,000-tonne cargo of gasoil, or diesel, containing 0.005 per cent sulfur last week, a senior official at state-run Bangladesh Petroleum Corporation (BPC) told the FE Wednesday.

This is the first oil supply from India's state-owned entity to Bangladesh after 2020, he said.

Prior to supplying diesel, IndianOil has inked a deal with the BPC to supply around 390,000 tonnes of 0.005 per cent sulfur gasoil, A-1 jet fuel and 95 RON gasoline, or octane, combined until December 2023, said the BPC official.

Of the total, 330,000 tonnes will be gasoil, 40,000 tonnes jet fuel and 20,000 tonnes 95 RON gasoline, he said.

The Indian firm has already been listed as a long-term oil supplier for Bangladesh and likely to continue supplying oil in future like other listed long-term suppliers.

Earlier, it had supplied around 430,000 tonnes of gasoil, 50,000 tonnes jet fuel and 30,000 tonnes 95 RON gasoline during the July-December period in 2020 after winning a tender.

The BPC also imported around 400,000 tonnes of gasoil from the Indian state corporation during fiscal year 2005-06.

Meanwhile, the maiden cross-country oil pipeline, known as India-Bangladesh Friendship Pipeline, also commenced its test run on Wednesday and would continue for a week before its formal launching slated for March 18, said sources.

Indian Prime Minister Narendra Modi and Bangladesh Premier Sheikh Hasina are expected to inaugurate the operations of the pipeline jointly through videoconferencing, they said.

Bangladesh is also all set to import gasoil via the pipeline connecting the two countries from around mid-March, BPC chairman ABM Azad said earlier.

The pipeline stretches 125 km through Bangladesh and 5 km through India, passing through Panchagarh, Nilphamari and Dinajpur to the Parbatipur oil storage facility in Bangladesh.

Currently, Bangladesh imports around 80,000 tonnes of gasoil from the Numaligarh Refinery Ltd (NRL), another Indian company, via the West Bengal Railway and then the Bangladesh Railway to Parbatipur oil depot in the country's north.

The country will have to continue importing diesel through railways until this year's end as construction work of several tank terminals at Parbatipur is not yet completed.

Once the cross-border pipeline begins its full operation, Bangladesh will cease importing gasoil from India by railway, said the BPC official.

Officials said the BPC has projected to import around 7.69 million tonnes of refined products during January to December 2023, up 18.30% from the last calendar year's revised projection.

It has projected to import around 5.31 million tonnes of 0.005 per cent sulfur gasoil, 700,000 tonnes of Jet A-1 fuel, 600,800 tonnes of 95 RON gasoline, 900,000 tonnes of high sulfur fuel oil (HSFO) with 3.5 per cent sulfur and 180,000 tonnes of 0.5 per cent sulfur marine fuel during January to December period of 2023, said the BPC official.

The BPC will source around half of its total refined oils through the international tendering system and the remaining half through government-to-government negotiations with state-run oil suppliers from across the world.

BPC imported around 6.50 million tonnes of refined petroleum products in 2022.

With the inclusion of the IndianOil, the BPC has nine listed suppliers of refined oil products under the G-to-G arrangements, which include Kuwait Petroleum Corporation, or KPC of Kuwait, PETCO Trading Labuan Company Limited, or PTLCL, of Malaysia, Emirates National Oil Company (Singapore) Pte. Ltd., or ENOC, Duabi of UAE, Petrochina (Singapore) Pte. Ltd, of China, PT Bumi Siak Pusako, or BSP, of Indonesia, Unipec Singapore Pte Ltd of China, PTT International Trading Pte of Thailand and Numaligar Refinery Limited, or NRL.

Bangladesh's state-run oil corporation usually floats tenders twice in every calendar year to import its refined oil products during January to June and July to December period to fix premium rates.

It also enters into negotiation with the selected suppliers twice to fix the petroleum prices.

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